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by colechristensen
943 days ago
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There get to be points in some commodities where providers temporarily do want to pay for people to take their product. Electric power is one where supply is not particularly elastic and does need to be disposed of when there is too much for grid stability. This has happened a couple of times with oil pipelines as well. Markets tend to figure these things out quickly though. Commodities contracts that settle in the actual commodity and not in cash are actual obligations on both sides to deliver and take delivery. At some point in order to get rid of the obligation to take delivery at some point people are willing to pay to get rid of their contracts. Sometimes this happens when speculators make crazy bets during instability. |
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